Using a mobile device to purchase goods and services online is becoming increasingly common. Traditionally, merchants create websites to display and document their goods and services. Consumers visit these websites to find something specific, simply browse to see what is available, or discover something through serendipity. With the proliferation of mobile devices having smaller screens and primitive controls, merchants are now offering applications (“apps”) designed to operate independently on these devices, outside web browsers, with simpler navigation controls and data entry tools. Because the business rules, processing, and data reside on remote servers, the apps must still be wirelessly connected to servers in order to function.
Regardless of the platform, presently available online payment systems require the merchant to provide a mechanism to complete a purchase and receive the associated funds. This is often the most cumbersome part of the process, particularly if the consumer is a first-time customer of the particular merchant. There are a wide variety of payment systems and platforms, e.g., PayPal, available for mobile devices to make payments, but virtually all are tied directly to processing by third party credit card or debit card companies (e.g., Visa, Citibank, etc.) in conjunction with these purchases.
Typically, third party credit card or debit card companies extract a fee for processing the payment, averaging 2% or more of the payment amount. The payment processing fee is normally paid by the merchants themselves who pass at least a portion of the fee through to consumers in pricing of goods and services. Thus, the third party payment processing increases costs to the consumers.
Another problem with presently available payment systems is the lack of security. Sensitive personal and financial information, such as names, card numbers, and passwords, are exposed every time a consumer makes a purchase. Thieves steal credit/debit card information from poorly secured corporate locations. Actual thefts and the risk of financial liability to consumers and merchants both increase the costs of web commerce and discourage consumers from purchasing online.
Additionally, the use of social media is growing among persons of all ages, and companies, worldwide. With respect to payments, social media platforms currently supports person-to-person (P2P) payments (e.g., Facebook Payments in Messenger), which involve use of personal and merchant bank accounts to transfer funds between consumers. Ubiquitous social media providers, with both a personal (consumer) and a commercial (merchant) user base, already encompass most of the participants in retail commerce. Existing payment systems for connecting purchasers with sellers are available in a variety of options, all of which are complicated and expensive for both the consumer and the merchant. Moreover, payment systems currently used on social media platforms are susceptible to hacking, because sensitive financial information must be exchanged on an open internet connection, or rely on legacy payment methods such as credit cards, paypal, and the like. Other, newer payment methods such as Apple Pay, Samsung Pay, and the like charge additional fees.
It would, therefore, be desirable to have mobile device payment systems and methods that would overcome the above disadvantages.